Let’s Bury the Term “TAMP”

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In the mid-1990s, a bright, young executive at Charles Schwab, Chip Roame, noticed that a handful of investment advisory firms were opening an inordinate number of client accounts. He visited those firms to find out what was going on.

Chip discovered that this small group of innovative advisory firms had created a new business model. For an all-inclusive fee, advisors could outsource all aspects of investment account management and administration to them. The exact offering varied firm-to-firm, but their services included asset allocation, manager/fund selection, trading, performance reporting, billing, and account administration. This freed the advisors from the burdens of portfolio management and allowed them of devote time to other aspects of their business.

Chip coined the term “turnkey asset management program” to describe these firms. Our industry loves acronyms, so these firms soon became known as “TAMPs.” For almost three decades the name stuck.

It’s time to kill it. I spoke to Chip recently and he agrees. Here’s why.

The problem with the term

From the beginning, there was a problem with the term TAMP. If you didn’t already know that it was an acronym for “turnkey asset management program,” it was meaningless gibberish. And, especially in the early years, advisors and clients had no idea what a TAMP was.

Today, most advisors and a small handful of clients know what a TAMP is, at least in a fuzzy, general sort of way. But I still run into advisors who stare at me blankly if I tell them I am in the TAMP business, which I have been since before the term TAMP was invented.

Clear communication is (or should be) highly valued and jargon is (or should be) universally frowned upon; the term TAMP has no value whatsoever in a conversation with a client. Its use would be an off-putting speed bump to relationship building.